AASA Economic Stimulus Update #1 Question & Answer March 3, 2009

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1 AASA Economic Stimulus Update #1 Question & Answer March 3, 2009 AASA s 1 st Economic Stimulus Webinar was a success! We received over 100 follow up questions during and after the webinar, which we have organized and answered here. They are grouped into seven categories: Title I, IDEA, State Stabilization Fund, Maintenance of Effort and Supplement/Supplant, Governor and State Legislature, Budgeting for Your District, and Other. WEBINAR INFORMATION Is the slideshow presentation from the webinar available for distribution? The slideshow presentations for each of the webinars will be available to AASA members ( Where do I register for the remaining economic stimulus webinars? AASA members can sign up online ( TITLE I Would adding a Title I math teacher to our staff qualify for Title I funds? Yes, but remember that these may be one time funds. Once the stimulus funds go away, the district would be responsible for the staff position. If a school district has Title I schools in school improvement, must part of the Title I Stimulus funds be set aside for public school choice and/or supplemental educational services? Yes. If they are in school improvement, 20% of stimulus funds must be set aside for public school choice and/or supplemental educational services. Can Title I monies be used for building renovations? No. Is the 50% reduction of effort allowable under the Title I stimulus package? No. The language of Title I permits a maintenance of effort reduction only if there is a precipitous decline in state and/or local revenue. If we have a locally funded pre school, can we change that to a Title I Pre school and not be supplanting if we add classes or sections? No. If you have an existing program, you can add new classes, but you cannot put the money into an existing class. IDEA To clarify: Federal special education dollars must be spent on special education. That being said, the 50% provision permits the reduction of those state and local general education funds that have been subsidizing the shortfall of federal and state special education funding. Your district is allowed to reclaim your local effort in special education up to an amount equal to 50% of your federal increase, providing that you use those local dollars for activities authorized under ESEA, including the 93 grant programs listed in ESEA. Can the IDEA money be used for technology in special education classrooms? Yes. Can IDEA money be used for accessibility such as an elevator? No. If your plans for FY 2010 call for discontinuation of a project that used to be funded by IDEA, but was taken over more and more with local funds due to reduction in IDEA allocations, could the new IDEA funds be used to continue the project (i.e., external counseling services for students/parents)? If you were running it last year with local money, you cannot run it next year with federal money. Can IDEA money be used for local/state salaries for special education staff this year? No.

2 Can I use IDEA funds to add staff to our special education program? Yes. Must the reclaimed local dollars be spent on new activities? No, they only have to be spent on activities that are included in any of the ten titles of ESEA. With the IDEA 50% funds, can we utilize that money to fund special education teacher units that we normally fund with local dollars? It is not federal special education money that is displaced. You are reclaiming state and local dollars that you can use for any of the purposes in ESEA. If you can justify this expenditure on staff under ESEA, then it would be an appropriate use. What are the criteria for the 50% of displaced special education money (IDEA money)? You must use the displaced funds within the allowable uses listed in ESEA. Hypothetical situation: Assume we pay $100,000 for a special education teacher. If we receive $100,000 in new IDEA money through the stimulus package, can we use 50% ($50,000) to help pay for the teacher? If not how does the 50% freed from the MOE work? If the teacher is a new teacher, you can use the IDEA dollars to pay for that teacher. If the teacher was already on your staff and paid with local funds, then you could use some of your reclaimed funding to help pay for that position. Is the IDEA money for one year or longer? It is a supplemental appropriation for federal fiscal year You have 27 months to obligate the funds after they have been received. What is the likelihood that the IDEA funding increases through the stimulus fund will be sustained after the 27th month? Continuing discussion in and around Capitol Hill centers on the debate of whether the IDEA funding increases are one time funds or if they establish a new baseline. It is AASA s hope and intention to work to sustain these funds in the coming years. We can find the current allocation for Title I by district within states on ed.gov. Where can we find the IDEA B current allocations by district? This information is not yet posted, as of 3/3/09. How much flexibility will districts have with the IDEA stimulus funds? Very little. You can use up to 15% of your IDEA allocation for early intervening services including professional development to help reduce the number of children in special education and/or the overrepresentation of minority students in special education. We have heard that 15% of the Title and IDEA must be used for early childhood programs. Has that 15% been removed prior to the allocation numbers provided to districts? While this was true in earlier Senate version of the bill, it was removed from the final version. Do the current regulations of spending money on IDEA or Title I on private school children apply to the stimulus money? Yes. The equitable participation language applies to the Title I, IDEA, and Education Technology increases. STATE STABILIZATION FUND Could state stabilization money be used for infrastructure, e.g. wiring, switches, etc...? Yes. Can we use state stabilization funds for the removal of asbestos? Yes. Can State Stabilization money be used to fund cuts in Career and Technical Education, Teacher Compensation Assistance and Sparsity? Yes. Can SEAs use the stabilization fund dollars for purchase of textbooks, etc.? LEAs would be able to use their stabilization dollars to buy textbooks. SEAs would be eligible to purchase textbooks out of the $8.8 billion pot of flexible money. What if any timelines are in place for applying for the federal stabilization and for getting a response from the Feds? You do not need to apply for the state stabilization funds. At this time, we do not have the final timeline. I understand that Secretary Duncan has billions of dollars for his discretionary use. What are you hearing about his priorities? Do you have any idea when regulations or guidelines on those dollars

3 will come our way? Secretary Duncan refers to it as the Race to the Top Fund, an opportunity to improve schools and foster innovation. We await further detail, including regulations and guidelines. MAINTENANCE OF EFFORT/SUPPLEMENT SUPPLANT Maintenance of Effort: To be eligible for Title I funds, you have to spend at least 90% of what you spent the previous year. Supplement Supplant: You need to add to what you are doing. You cannot use federal Title I or IDEA funds to provide programs that were operated by state and/or local funds in the previous year. Is FY06 maintenance of effort tied to a dollar amount or a percentage? It is tied to a dollar amount. Does the maintenance of effort flexibility you've described for IDEA apply to new Title I money? No. The only real help I see for my school is in the reduction of effort. How can I find out more about this concept? Read section 613 of IDEA. The full text of the legislation is available online. ( bin/query/f?c108:1:./temp/~c108xrtaa9:e151873:) What will be the basis of maintenance of effort the year following expenditure of federal funds? That has yet to be determined. We need to see how Congress and the administration account for the stimulus funds. What's the timeframe on "previously" in the supplant definition? Previous refers to the immediate preceding school year. In this case, the previous year would be the school year. What are the safety nets in place to prevent supplanting while utilizing 2009 money early? The stimulus oversight group (recovery.gov), along with the states, will be overseeing the use of stimulus funds, including the prevention of supplanting. How does supplement not supplant benefit my district? The federal dollars are meant as additional dollars for districts to expand current services or add more programs. It ensures that new federal spending feels like new, additional funding rather than a replacement of local effort. We are planning to add a reading specialist position with the new money. The teacher is currently employed in a very different position. Is this an issue? This does not seem to be supplanting. Be careful, though: if this person was previously a reading teacher, and the change would simply adjust how they are being paid, that would be supplanting. How is rehiring staff that were part of a RIF (reduction in force) different from supplanting? Supplement/supplant does not apply to the state stabilization fund. You can rehire any staff, regardless of how their salary was paid local, state or federal if you are using your state stabilization funds. How will the stimulus money help if there are non supplanting restrictions on the IDEA money? It can help in two ways: you can reduce your effort in special education or increase the amount available for early intervening. GOVERNOR AND STATE LEGISLATURE Given the SEA's reluctance to get the stimulus money out to the local schools quickly, how should local schools push the SEA and Governor to get the money out? Partner with your state administrator/superintendent associations, and work with your state education department and governor. If need be, apply public pressure. Under the state stabilization fund, is the state Governor allowed to keep 18%, leaving 82% for schools to be distributed under the Title I formula? The governor doesn t get to keep the 18%. Governors can hold on to it and use it for non education related items. The 82% must be used by states to backfill their state funding formulas and provide increases for coming years. If there is additional money left over, those dollars will be driven to local districts by the Title I formula.

4 What's your sense of when we'll have "final" answers or clarity on all of this? We expect the final answers to be available by this summer. We expect the Department of Education to release information as it becomes available. Does the Governor's application have to be approved by the state legislature? That depends on your state law and state constitution. Can we change our current state aid formula and not put state stabilization dollars at risk? Yes. Will AASA coordinate with state organizations on a lobbying strategy to free funds ASAP? Yes. Are states required to distribute stabilization funds to school districts? Yes 82% of the state s allocation is available for education, though there is no required split between K 12 and higher education. How much control of the stimulus money in Title I and IDEA will the State have control over? States have no new authority. They will control the amount stipulated in the federal IDEA and Title I statutes. Can a state elect to hold the additional IDEA and Title funds for allocation over a three year period or is this money required to be sent to school systems all at one time? No. The money must be sent to school districts, according to the formulas provided in the law. Has any other state talked about using the state stabilization funds to supplant the state formula and then use the supplanted funds to provide a state tax cut? At this point, we know of no states having made this an official policy. BUDGETING FOR YOUR DISTRICT How will the requirement to spend 85% in the first year (under Title I) be impacted by stimulus dollars and the FY09 regular entitlement? You do not have to spend 85% in the first year. You have 27 months to spend your allocation. The carry over provision allows you to carry over up to 15 percent of each annual allocation. Can you use the Title I stimulus funds for the upcoming school year, and save the new allocations (09 10) as carryover? Yes, though the typical spending pattern is that new dollars go to the back of the line. Federal funds are typically spent in the order in which they were received. Does the fact that you have 27 months to spend the money mean that you need to apply to carryover the funds from one year to another? No. The regular carry over rules still apply. Your stimulus funds will be covered under your Continuing Title I application. Are we saying that all Title I funding for the 27 month period will be a single payment? The Title I payment may be a one time payment to the state. We do not know how the states will distribute the funds. Will we have to keep two sets of books on these monies? You are already maintaining two sets of books: one for federal funds, one for state funds. This practice will continue. If money is available during this fiscal year, are you suggesting that we may expend back through the beginning of the FY? No. In fact, we warn against that. How accurate are the lists showing how much each district will receive? The lists on the US Department of Education website are estimates. It is possible that your district s allocation could change slightly from the posted amount, after the required set asides are taken out at both the federal and state levels. Do the totals posted include both Title I and IDEA? No. At this point (3/3/09), it refers to only to Title I funds. Am I correct that the dollar allocations for Title I and IDEA that have been posted represent the total LEAs will receive to expend over the next 27 months? They will receive the stimulus funds as a supplemental appropriation to We think it will be a lump sum delivery to the states. We cannot predict how the states will distribute the funds to the local level.

5 If the funds come in the current year, can they be used to offset increased costs for the current year, or must they only be applied to the FY10 & FY11? The state stabilization funds can be used as soon as they are received. The federal funds could offset current year cuts to the federal programs (IDEA and ESEA) in your state. Will a "new" needs assessment have to be conducted or can we use existing line items and amend budgets to add the additional funds? As a supplemental appropriation, you should not have to do a new needs assessment. The final decision will be made by the state. Is there any "option" a state has that would allow a state to avoid the requirement for the stimulus monies in education to be used to backfill to 2008 or 09 level? This will be determined by your state and/or Governor. There is flexibility in the use of the funding for education, but all of the dollars must be driven down to local school districts or colleges/universities. How long will we have to spend the stimulus funds? You have 27 months to obligate the IDEA and Title I funds. You have through 2011 to spend the state stabilization funds. Are there consequences if states do not distribute the funds to districts prior to July 1? Unfortunately, no. OTHER Is there any money for green projects in schools such as wind generation and solar cells? Green projects are an allowable use for the state stabilization funds. Additionally, you can use you QZAB and tax credit bonds on green projects. Does Broadband funding come through states or by grants to schools? How will we know if we get any funding for broadband? Details are still unclear on how the broadband dollars will be distributed. It is unlikely that the dollars will flow directly to districts; a more likely scenario is that service providers (who will be building out broadband access) will want to partner with school districts to provide such access. What does the extension for Medicaid mean to me as a school administrator? It means that your district will continue to be able to claim for reimbursement for providing Medicaid eligible services, transportation, and claiming. It will offset the cost of healthcare services for students with disabilities (e.g.: OT, PT, and speech therapy). What steps do we need to take to ensure a permanent change in Medicaid reimbursement? Work with AASA to amend Title XIX, Section 19 of the Social Security Act to ensure that school continue to be able to claim Medicaid reimbursement for services, transportation, and administrative costs. Will the funding apply to McKinney Vento? Yes. Can we use the additional funding for transportation? McKinney Vento dollars can be used for transportation. The state stabilization fund cannot be used for vehicles or vehicle upgrades. Are ELL Programs, assessments, services for LEP students specifically addressed? No, but they are an allowable use of funding under the state stabilization fund and under the reclaimed local effort in special education. Will free and reduced lunch counts be used to determine poverty levels rather than population counts? Unfortunately, no. If a Bond Issue is approved by voters in April 2009 for new construction, can this qualify for Tax Credit Bonds? We assume so, though we are awaiting further guidance on this issue from the US Department of Treasury. Our district has been using district money to subsidize our Title I allocation in order to avoid cutting Title I staff for the past couple of years. Can we use the stimulus money to replace this? No. This is a good question, and we are pursuing this.

6 Are any of the stimulus funds going to be directly sent towards virtual education or distance learning programs? No. Are there stimulus funds available for school security measures (security cameras, etc.)? Yes. Is there additional money for the National School Lunch Program for equipment? Yes. The stimulus includes $100 million for grants to school food authorities for equipment assistance. Funds will be distributed to states based on the proportion of the State Administrative Expense funds received. State agencies must then make grants to school food authorities on a competitive basis, with priority given to schools in which no less than 50 percent of the students are eligible for free and reduced price meals. If positions are RIF's because of budget cuts, may the stimulus program be used to rehire these individuals? Yes. The state stabilization fund was designed specifically for this. What is teacher incentive concerning the stimulus package? What are some of the incentives? The Teacher Incentive Program is a national competitive grant program to provide districts funding to pursue alternative compensation plans, including merit pay and school based performance measures. Can you use the funds to purchase a handicap accessible bus? No. What is the level of low socio economic status needed to qualify for a QZAB? 35% free and reduced lunch count. Don t forget to sign up for the rest of AASA s Economic Stimulus webinars! Questions? Contact our Advocacy & Policy Team Bruce Hunter Associate Executive Director, Advocacy and Policy bhunter@aasa.org Mary Kusler Assistant Director, Advocacy and Policy mkusler@aasa.org Noelle Ellerson Policy Analyst nellerson@aasa.org